"This SOP is envisaged to enable the department to leverage technology and risk-based tools to encourage self-compliance and conduct scrutiny of returns with minimal interaction with the registered persons," says the instructions issued by the board.
Emphasising on the relevant statutory provisions for scrutiny of returns as per section 61 of Central Goods and Services Tax (CGST) Act and rule 99 of CGST Rules, the SOP tasks directorate general of analytics and risk management (DGARM) with the selection of returns for scrutiny based on specific risk parameters. The DGARM would communicate the same to the field formations through the directorate of data management (DDM) portal for further action, where the superintendent of central tax has been assigned the functions of 'proper officer' as per section 61(1), it says.
However, since there is a likelihood of data change at the time of scrutiny due to subsequent compliances by the taxpayer or his suppliers, CBIC has advised the concerned officer to rely upon the latest available data.
It says, "After the list of GST identification numbers (GSTINs) selected for scrutiny has been communicated to the field formations, the proper officer should finalise a scrutiny schedule. While preparing the scrutiny schedule, the scrutiny of the GSTINs, which appear to be riskier based on the likely revenue implication indicated by DGARM, may be prioritised."
However, CBIC clarifies that scrutiny of one GSTIN will mean scrutiny of all returns about a fiscal year (FY) for which the said GSTIN has been identified for scrutiny.
The board also recommends the proper officer to rely on information available on the system, statements furnished by assessee, data and details made available in DGARM, Advanced Analytics in Indirect Taxation (ADVAIT), GST network (GSTN), and e-way bill portal to verify the correctness of the returns during scrutiny.
However, CBIC suggests that there should normally not be any need to seek documents or records from the taxpayers before issuing form GST ASMT-10 or the show cause notice (SCN) to the assessee and to minimise the interface between the proper officer and the registered person as far as possible.
The board also says discrepancies communicated to assessee vide form GST ASMT-10 may, as far as possible, be specific in nature and not vague or general. Also, while issuing the said SCN, the officer may, as far as possible, quantify the amount of tax, interest and any other amount payable concerning such discrepancies, including the payments made through form GST DRC-03.
CBIC also directs closure of scrutiny proceedings where the assessee's explanation regarding discrepancy is found acceptable by the officer. If the assessee's explanation is not satisfactory, the officer is mandated to determine arrears under section 73 or 74.
In the SOP, the board stipulated timelines for scrutiny, such as seven days for finalisation of scrutiny schedule, 30 days for sharing the scrutiny schedule by the zone with DGGST, within the month as mentioned in the scrutiny schedule for issuance of form GST ASMT-10, and 30 days for filing reply to SCN by the assessee in form GST ASMT-11.
Further, it has gives 30 days from receipt of form GST ASMT-11 for issuance of an order in form GST ASMT12 for acceptance of reply, 15 days from completion of 30 days of SCN for initiation of proceedings under section 73 or 74 if no response is furnished by assessee otherwise 30 days from receipt of assessee reply for initiation of proceedings under section 73 or 74.
To ensure reporting and monitoring, CBIC has specified maintenance of a scrutiny register by the proper officer of the GSTINs allotted and monitoring of scrutiny exercise as per the scrutiny schedule by the jurisdictional principal commissioner or commissioner monthly.
The board also clarifies that "Till the time scrutiny module is made available…the aforesaid interim procedure…may be conducted on the manual basis" and "Any communication with the taxpayer for scrutiny shall be made with the use of DIN as per …circular no. 122/41/2019-GST dated 5 November 2019."